Business Directories

Sudan rules out shutdown of oil pipeline

Khartoum, January 15, 2012

Sudan will not shut down a pipeline carrying crude oil exports from South Sudan despite a row with Juba over sharing oil revenues, a senior Sudanese oil official said on Sunday.

Land-locked South Sudan has accused Khartoum of blocking its oil exports at the northern port of Port Sudan and warned a north-south pipeline carrying its oil might be shut down within days as a result.

Azhari Abdalla, director general of Sudan's Oil Exploration and Production Administration, said the pipeline would stay open.

'What I can confirm from our side is we will not close any line. It will stay open. You can take this for granted,' he told Reuters when asked whether the pipeline would be closed.

He declined further comment on the conflict, saying bilateral talks would be held on Tuesday at the African Union in Ethiopia.

'We will discuss with our brothers in the South so we can be paid,' he only said.

On Saturday South Sudan said Khartoum had ordered the loading onto a tanker belonging to Khartoum of 650,000 barrels of southern oil worth $65 million at Port Sudan.

It previously accused Sudan of blocking the export of 3.4 million barrels at Port Sudan and asking foreign oil companies to divert southern oil to two northern refineries.

South Sudan took over two thirds of Sudan's oil production of around 490,000 barrels per day when it became independent in July under a 2005 peace agreement that ended decades of civil war.

The new African nation needs to use a northern pipeline and the Red Sea port of Port Sudan to export its crude, but both sides have failed to reach a deal on how much it will pay.

On Friday, the foreign ministry said Sudan was holding two southern shipments because South Sudan had failed to pay the port duties. Two other vessels turned back after approaching Port Sudan when they learned that port duties had not been paid, it added.

Sudanese President Omar Hassan al-Bashir said this month Khartoum would impose a fee until a deal is reached with Juba over a transit fee. He did not elaborate.

Sudan is undergoing a severe economic crisis with high food inflation, a shortage of dollars and unemployment. - Reuters